EXHIBIT 1
11,100,000 SHARES
CINEMARK, INC.
CLASS A COMMON STOCK
FORM OF UNDERWRITING AGREEMENT
July [ ], 2002
▇▇▇▇▇▇ BROTHERS INC.,
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.,
As Representatives of the several
Underwriters named in Schedule 1,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Cinemark, Inc., a Delaware corporation (the "COMPANY"),
proposes to sell 11,100,000 shares (the "FIRM STOCK") of the Company's Class A
Common Stock, par value $0.001 per share (the "COMMON STOCK"). In addition, the
Company proposes to grant the Underwriters an option to purchase up to an
additional 1,655,000 shares of the Common Stock on the terms and for the
purposes set forth in Section 2 (the "OPTION STOCK," the Firm Stock and the
Option Stock, collectively the "STOCK"). This is to confirm the agreement
concerning the purchase of Stock from the Company by the Underwriters. ▇▇▇▇▇▇
Brothers Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. shall act as representatives (the
"REPRESENTATIVES") of the several underwriters named in Schedule 1 hereto (the
"Underwriters").
SECTION 1. Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees that:
(a) A registration statement on Form S-1 with respect to the
Stock has (i) been prepared by the Company in conformity with the requirements
of the Securities Act of 1933, as amended (the "SECURITIES ACT"), and the rules
and regulations (the "RULES AND REGULATIONS") of the Securities and Exchange
Commission (the "COMMISSION") thereunder, (ii) been filed with the Commission
under the Securities Act and (iii) become effective under the Securities Act.
Copies of such registration statement and each of the amendments thereto have
been delivered by the Company to you. As used in this Agreement, "EFFECTIVE
TIME" means the time as of which such registration statement, or the most recent
post-effective amendment thereto, if any, was declared effective by the
Commission; "EFFECTIVE DATE" means the date of the Effective Time; "PRELIMINARY
PROSPECTUS" means the prospectus included in such registration statement, or
amendments thereof, before it became effective under the Securities Act and any
prospectus filed with the Commission by the Company with the consent of the
Representatives pursuant to Rule 424(a) of the Rules and Regulations;
"REGISTRATION STATEMENT" means such registration statement, as amended at the
Effective Time, including all information contained in the final prospectus
filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations
and
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deemed to be a part of the registration statement as of the Effective Time
pursuant to Rule 430A of the Rules and Regulations; and "PROSPECTUS" means the
prospectus in the form first used to confirm sales of Stock. If the Company has
filed an abbreviated registration statement to register additional shares of
Common Stock pursuant to Rule 462(b) under the Securities Act (the "RULE 462
REGISTRATION STATEMENT"), then any reference herein to the term "REGISTRATION
STATEMENT" shall be deemed to include such Rule 462 Registration Statement. The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform in all material respects to the applicable requirements
of the Securities Act and the Rules and Regulations and do not and will not, as
of the applicable Effective Date (as to the Registration Statement and any
amendment thereto) and as of the applicable filing date (as to the Prospectus
and any amendment or supplement thereto) contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided that no
representation or warranty is made as to information contained in or omitted
from the Registration Statement or the Prospectus or any amendments or
supplements thereto in reliance upon and in conformity with written information
furnished to the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein.
(c) The Company and each of its subsidiaries (as defined in
Section 16) have been duly organized and are validly existing as corporations or
other business organizations, as applicable, in good standing under the laws of
their respective jurisdictions of incorporation or organization, as applicable,
are duly qualified to do business and are in good standing as foreign
corporations or other business organizations, as applicable, in each
jurisdiction in which their respective ownership or lease of property or the
conduct of their respective businesses requires such qualification, and have all
power and authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged, except where the failure to so
qualify to be in good standing would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the consolidated
financial position, stockholders' equity, results of operations, business or
prospects of the Company and its subsidiaries taken as a whole (a "MATERIAL
ADVERSE EFFECT"); and none of the subsidiaries of the Company other than
Cinemark USA, Inc., Cinemark International, L.L.C., Multiplex Properties, Inc.,
Cinemark Mexico (USA), Inc., Cinemark Holdings Mexico S.A. de ▇.▇. de C.V.,
Cinema Properties, Inc., Cinemark Leasing Corp. and Cinemark de Mexico S.A. de
C.V. is a "SIGNIFICANT SUBSIDIARY," as such term is defined in Rule 405 of the
Rules and Regulations.
(d) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the Company
have been duly authorized and validly issued, are fully paid and non-assessable
and conform to the description thereof contained in the Prospectus; and all of
the issued shares of capital stock or membership interests, as applicable, of
each subsidiary of the Company have been duly authorized and validly issued and
are fully paid and non-assessable and, except as described in the Prospectus and
for directors' qualifying shares, are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims.
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(e) The shares of the Stock to be issued and sold by the
Company to the Underwriters hereunder have been duly authorized and, when issued
and delivered against payment therefor in accordance with this Agreement, will
be validly issued, fully paid and non-assessable; and the Stock will conform to
the descriptions thereof contained in the Prospectus.
(f) This Agreement has been duly authorized, executed and
delivered by the Company.
(g) The execution, delivery and performance by the Company of
this Agreement and each of the other documents to be entered into in connection
with the issuance and sale of the Stock and the consummation by the Company of
the transactions contemplated hereby and thereby will not (i) conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement, lease, pledge or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, (ii) result in any violation of the
provisions of the charter or bylaws of the Company or the charter or bylaws or
any joint venture, partnership, limited liability company, shareholders' or
other agreement or organizational document of any of the Company's subsidiaries,
or (iii) result in any violation of any statute or any order, rule or regulation
of any court or governmental agency or body (whether domestic or foreign) having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets except in the case of clauses (i) and (iii), such
conflicts, breaches or violations that in the aggregate would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect,
or impair the ability of the Company to perform its obligations under this
Agreement; and, except for the registration of the Stock under the Securities
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act of 1934, as amended
(the "EXCHANGE ACT") and applicable state or foreign securities laws in
connection with the purchase and distribution of the Stock by the Underwriters,
no consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body (whether domestic or foreign) is
required for the execution, delivery and performance of this Agreement or any of
the other documents to be entered into in connection with the issuance and sale
of the Stock and the consummation of the transactions contemplated hereby and
thereby.
(h) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the Company
owned or to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration Statement
or in any securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act.
(i) Except as described in the Prospectus, the Company has not
sold or issued any shares of Common Stock during the six-month period preceding
the date of the Prospectus, including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act other than shares issued pursuant to
employee benefit plans, qualified stock options plans or other employee
compensation plans or pursuant to outstanding options, rights or warrants.
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(j) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements included in
the Prospectus, any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree (whether domestic or
foreign) otherwise than as set forth or contemplated in the Prospectus except
where such losses or interferences would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect; and, since such
date, there has not been any material change in the capital stock or material
increase in the long-term debt of the Company or any of its subsidiaries or any
adverse change, or any development involving a prospective adverse change, that
would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, otherwise than as set forth or contemplated in the
Prospectus.
(k) The consolidated financial statements (including the
related notes and supporting schedules) filed as part of the Registration
Statement or included in the Prospectus present fairly in all material respects
the financial position and results of operations of the Company and its
subsidiaries, at the dates and for the periods indicated, and have been prepared
in conformity with generally accepted accounting principles in the United States
applied on a consistent basis throughout the periods involved.
(l) Deloitte & Touche LLP, who have certified certain
financial statements of the Company, whose report appears in the Prospectus and
who have delivered the initial letter referred to in Section 8(g) hereof, are
independent public accountants as required by the Securities Act and the Rules
and Regulations.
(m) The Company and each of its subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects, except such as are described in the Prospectus
or such as could not, individually or in the aggregate, have a Material Adverse
Effect; and, except as described in the Prospectus, all assets held under lease
by the Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases, except such as are described in the Prospectus or such as
could not, individually or in the aggregate, have a Material Adverse Effect.
(n) The Company and each of its subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks which the Company
believes are adequate for the conduct of their respective businesses and the
value of their respective properties.
(o) The Company and each of its subsidiaries own, possess or
can acquire on reasonable terms adequate rights to use all material patents,
patent applications, trademarks, service marks, trade names, trademark
registrations, service ▇▇▇▇ registrations, copyrights and licenses necessary for
the conduct of their respective businesses and have no reason to believe that
the conduct of their respective businesses will conflict with, and have not
received any notice of any claim of conflict with, any such rights of others
that, if determined adversely to the Company or any of its subsidiaries would
reasonably be likely to have, individually or in the aggregate, a Material
Adverse Effect.
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(p) Except as described in the Prospectus, there are no legal
or governmental proceedings (whether domestic or foreign) pending to which the
Company or any of its subsidiaries is a party or of which any property or assets
of the Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect;
and to the best of the Company's knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others.
(q) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and Regulations
which have not been described in the Prospectus or filed as exhibits to the
Registration Statement.
(r) No relationship, direct or indirect, exists between or
among the Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is required to be
described in the Prospectus which is not so described.
(s) No labor disturbance by the employees of the Company
exists or, to the knowledge of the Company, is imminent, which would reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect.
(t) The Company and members of its controlled group within the
meaning of Sections 414 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the "CODE")
are in compliance in all respects with all presently applicable provisions of
the Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), except where the
failure to be in such compliance would not reasonably be likely to have,
individually or in the aggregate, a Material Adverse Effect; no "REPORTABLE
EVENT" (as defined in ERISA) has occurred and is continuing with respect to any
"PENSION PLAN" (as defined in ERISA) for which the Company and such members
would have any liability; except for matters that would not reasonably be likely
to have, individually or in the aggregate, a Material Adverse Effect; the
Company and such members have not incurred and does not expect to incur
liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "PENSION PLAN" or (ii) Sections 412 or 4971 of the Code,
and each "PENSION PLAN" for which the Company and such members would have any
liability that is intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such qualification.
(u) The Company has filed (or obtained extensions to file) all
federal, state, local and foreign income and franchise tax returns required to
be filed through the date hereof, except where the failure to so file would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, and has paid all taxes due thereon, other than those (i)
currently payable without penalty or interest or (ii) being contested in good
faith and by appropriate proceedings and for which, in the case of both (i) and
(ii), adequate reserves have been established on the books and records of the
Company in accordance with generally accepted accounting principles in the
United States. No tax deficiency has been determined adversely to the Company or
any of its subsidiaries which has had (nor does the Company have
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any knowledge of any tax deficiency which, if determined adversely to the
Company or any of its subsidiaries) or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(v) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be disclosed in
the Prospectus, the Company has not (i) issued or granted any securities (other
than pursuant to the Company's employee benefit plans described in the
Prospectus), (ii) incurred any material liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred in the
ordinary course of business, (iii) entered into any material transaction not in
the ordinary course of business or (iv) declared or paid any dividend on its
capital stock.
(w) The Company (i) makes and keeps accurate books and records
and (ii) maintains internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit preparation
of its financial statements and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with management's
authorization and (D) the recorded accountability for its assets is compared
with existing assets at reasonable intervals.
(x) Neither the Company nor any of its subsidiaries (i) is in
violation of (A), in the case of the Company, its charter or bylaws or (B) in
the case of any of the Company's subsidiaries, its charter or bylaws or any of
its joint venture, partnership, limited liability company, shareholders' or
other agreement or organizational document as the case may be, except in the
case of this clause (B), where such violation would not be reasonably expected
to have, individually or in the aggregate, a Material Adverse Effect, (ii) is in
default in any respect, and no event has occurred which, with notice or lapse of
time or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease, pledge or other agreement or
instrument to which it is a party or by which it is bound or to which any of its
properties or assets is subject or (iii) is in violation in any respect of any
law, ordinance, governmental rule, regulation or court decree (whether domestic
or foreign) to which it or its property or assets may be subject or has failed
to obtain any material license, permit, certificate, franchise or other
governmental authorization or permit (whether domestic or foreign) necessary to
the ownership of its property or to the conduct of its business, except in the
case of clauses (ii) and (iii), such defaults, events, violations or failures
that in the aggregate would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect and provided, however, that while
the Company believes that it is in compliance with the provisions of the
Americans with Disabilities Act of 1990, as disclosed in the Prospectus, it is a
party to legal proceedings alleging violations of that act.
(y) Neither the Company nor any of its subsidiaries, nor to
the best of the Company's knowledge, any director, officer, agent, employee or
other person associated with or acting on behalf of the Company or any of its
subsidiaries, has used any corporate or organizational funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated or is
in violation of
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any provision of the Foreign Corrupt Practices Act of 1977; or made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment.
(z) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of toxic wastes,
medical wastes, hazardous wastes or hazardous substances by the Company or any
of its subsidiaries (or, to the knowledge of the Company, any of their
predecessors in interest) at, upon or from any of the property now or previously
owned or leased by the Company or its subsidiaries in violation of any
applicable law, ordinance, rule, regulation, order, judgment, decree or permit
or which would require remedial action under any applicable law, ordinance,
rule, regulation, order, judgment, decree or permit, except for any violation or
remedial action which would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect; there has been no material spill,
discharge, leak, emission, injection, escape, dumping or release of any kind
onto such property or into the environment surrounding such property of any
toxic wastes, medical wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by the Company or any of its subsidiaries or with
respect to which the Company or any of its subsidiaries have knowledge, except
for any such spill, discharge, leak, emission, injection, escape, dumping or
release which would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect; and the terms "HAZARDOUS WASTES", "TOXIC
WASTES", "HAZARDOUS SUBSTANCES" and "MEDICAL WASTES" shall have the meanings
specified in any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
(aa) The Company is not and, as of each Delivery Date after
giving effect to the issuance and sale of the Stock and the application of the
net proceeds therefrom as described in the Prospectus, will not be, an
"INVESTMENT COMPANY" as defined in the Investment Company Act of 1940, as
amended.
(bb) (i) The Registration Statement, the Prospectus and the
Preliminary Prospectus comply, and any further amendments or supplements thereto
will comply, with any applicable laws or regulations of foreign jurisdictions in
which the Prospectus or the Preliminary Prospectus, as amended or supplemented,
if applicable, are distributed in connection with the Directed Share Program (as
defined herein), and that (ii) no authorization, approval, consent, license,
order, registration or qualification of or with any government, governmental
instrumentality or court, other than such as have been obtained, is necessary
under the securities laws and regulations of foreign jurisdictions in which the
Directed Shares (as defined herein) are offered outside the United States.
(cc) The Company has not offered, or caused the Underwriters
to offer, any offered Stock to any person pursuant to the Directed Share Program
with the specific intent to unlawfully influence (A) a customer or supplier of
the Company to alter the customer's or supplier's level or type of business with
the Company or (B) a trade journalist or publication to write or publish
favorable information about the Company or its products.
(dd) The industry, statistical and market-related data
included in each of the Registration Statement and the Prospectus are derived
from sources that the Company reasonably
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and in good faith believes to be accurate, reasonable and reliable, and such
data agrees with the sources from which they were derived.
(ee) The Company has not taken, directly or indirectly, any
action designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company in connection with this transaction.
SECTION 2. Purchase of the Stock by the Underwriters. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 11,100,000 shares of
the Firm Stock to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set forth opposite that Underwriter's name in Schedule 1 hereto. The
respective purchase obligations of the Underwriters with respect to the Firm
Stock shall be rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Company grants to the Underwriters an option
to purchase up to 1,655,000 shares of Option Stock. Such option is granted for
the purpose of covering over-allotments in the sale of Firm Stock and is
exercisable as provided in Section 5 hereof. Shares of Option Stock shall be
purchased severally for the account of the Underwriters in proportion to the
number of shares of Firm Stock set forth opposite the name of such Underwriters
in Schedule 1 hereto. The respective purchase obligations of each Underwriter
with respect to the Option Stock shall be adjusted by the Representatives so
that no Underwriter shall be obligated to purchase Option Stock other than in
100 share amounts.
The purchase price of both the Firm Stock and any Option Stock
shall be $[ ] per share.
The Company shall not be obligated to deliver any of the
Option Stock to be delivered on any Delivery Date (as hereinafter defined),
except upon payment for all the Option Stock to be purchased on such Delivery
Date as provided herein.
SECTION 3. Offering of Stock by the Underwriters.
Upon authorization by the Representatives of the release of
the Firm Stock, the several Underwriters propose to offer the Firm Stock for
sale upon the terms and conditions set forth in the Prospectus.
SECTION 4. Directed Share Program. As part of the offering contemplated
by this Agreement, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. has agreed to reserve out of the
Stock set forth opposite its name on the Schedule 1 to this Agreement, up to
555,000 shares, for sale to the Company's employees, officers, and directors and
other parties associated with the Company (collectively, "DIRECTED SHARE
PARTICIPANTS"), as set forth in the Prospectus under the heading "Underwriting"
(the "DIRECTED SHARE PROGRAM"). The Stock to be sold by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney
Inc. pursuant to the Directed Share Program (the "DIRECTED SHARES") will be sold
by ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. pursuant to this Agreement at the public offering
price. Any Directed Shares not orally confirmed for purchase by any Directed
Share Participants by the end
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of the business day immediately following the date on which this Agreement is
executed will be offered to the public by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. as set forth
in the Prospectus.
SECTION 5. Delivery of and Payment for the Stock. Delivery of and
payment for the Firm Stock shall be made at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, at 10:00 A.M., New York City
time, on the fourth full business day following the date of this Agreement or at
such other date or place as shall be determined by agreement between the
Representatives and the Company. This date and time are sometimes referred to as
the "FIRST DELIVERY DATE." On the First Delivery Date, the Company shall deliver
or cause to be delivered certificates representing the Firm Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Firm Stock shall be
registered in such names and in such denominations as the Representatives shall
request in writing not less than two full business days prior to the First
Delivery Date. For the purpose of expediting the checking and packaging of the
certificates for the Firm Stock, the Company shall make certificates
representing the Firm Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the First Delivery Date.
The option granted in Section 2 will expire 30 days after the
date of this Agreement and may be exercised in whole or in part from time to
time, but in no event more than twice, by written notice being given to the
Company by the Representatives. Such notice shall set forth the aggregate number
of shares of Option Stock as to which the option is being exercised, the names
in which the shares of Option Stock are to be registered, the denominations in
which the shares of Option Stock are to be issued and the date and time, as
determined by the Representatives, when the shares of Option Stock are to be
delivered; provided, however, that this date and time shall not be earlier than
the First Delivery Date nor earlier than the second business day after the date
on which the option shall have been exercised nor later than the fifth business
day after the date on which the option shall have been exercised. The date and
time the shares of Option Stock are delivered are sometimes referred to as a
"SECOND DELIVERY DATE," and the First Delivery Date and any Second Delivery Date
are sometimes each referred to as a "DELIVERY DATE."
Delivery of and payment for the Option Stock shall be made at
the place specified in the first sentence of the first paragraph of this Section
5 (or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on such
Second Delivery Date. On such Second Delivery Date, the Company shall deliver or
cause to be delivered the certificates representing the Option Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Option Stock shall
be registered in such names and in such denominations as the Representatives
shall request in the aforesaid written notice. For the purpose of expediting the
checking and packaging of the certificates for the Option Stock, the Company
shall make the certificates representing the
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Option Stock available for inspection by the Representatives in New York, New
York, not later than 2:00 P.M., New York City time, on the business day prior to
such Delivery Date.
SECTION 6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than Commission's close of business on the second
business day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under the
Securities Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus except as permitted herein; to
advise the Representatives, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has been
filed and to furnish the Representatives with copies thereof; to advise the
Representatives, promptly after it receives notice thereof, of the issuance by
the Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Stock for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and, in the event of
the issuance of any stop order or of any order preventing or suspending the use
of any Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a signed copy of the Registration Statement as
originally filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of
the following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits) and (ii)
so long as a prospectus relating to the Stock is required to be delivered under
the Securities Act, each Preliminary Prospectus, the Prospectus and any amended
or supplemented Prospectus; and, if the delivery of a prospectus is required at
any time after the Effective Time in connection with the offering or sale of the
Stock or any other securities relating thereto and if at such time any events
shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
to amend or supplement the Prospectus in order to comply with the Securities
Act, to notify the Representatives and, upon their request, to prepare and
furnish without charge to each Underwriter and to any dealer in securities as
many copies as the Representatives may from time to time reasonably request of
an amended or supplemented Prospectus which will correct such statement or
omission or effect such compliance.
11
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Representatives, be required by
the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof to
the Representatives and counsel for the Underwriters and obtain the consent of
the Representatives to the filing, which consent shall not be unreasonably
withheld or delayed;
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver to the
Representatives an earning statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations;
(g) For a period of three years following the Effective Date,
to furnish to the Representatives, to the extent such information is not freely
available on the Internet, copies of all materials furnished by the Company to
its stockholders and all public reports and all reports and financial statements
furnished by the Company to the principal national securities exchange upon
which the Common Stock may be listed pursuant to requirements of or agreements
with such exchange or to the Commission pursuant to the Exchange Act or any rule
or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Stock; provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation, file a
general consent to service of process in any jurisdiction or subject itself to
taxation in respect of doing business in any jurisdiction in which it is
otherwise not subject;
(i) For a period of 180 days from the date of the Prospectus,
not to, directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition by any person at any time in the
future of) any shares of Common Stock or securities convertible into or
exchangeable for Common Stock (other than the Stock and shares issued pursuant
to employee benefit plans, qualified stock option plans or other employee
compensation plans existing on the date hereof or pursuant to currently
outstanding options, warrants or rights and shares of Common Stock or securities
convertible into or exchangeable for Common Stock to be issued to its Brazilian
partners as consideration for stock in its subsidiary, Cinemark Brasil S.A., as
described in the Prospectus), or sell or grant options, rights or warrants with
respect to any shares of Common Stock or securities convertible into or
exchangeable for Common Stock (other than the grant of options pursuant to
option plans existing on the date hereof), or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any of
the economic benefits or risks of ownership of such shares of Common Stock,
whether any such
12
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, in each case without the
prior written consent of ▇▇▇▇▇▇ Brothers Inc. on behalf of the Underwriters; and
to cause each stockholder, officer and director of the Company, designated by
▇▇▇▇▇▇ Brothers Inc. on behalf of the Underwriters and listed on Schedule 2
attached hereto, to furnish to the Representatives, prior to the First Delivery
Date, a letter or letters, substantially in the form of Exhibit A hereto,
pursuant to which each such person shall agree, subject to any exceptions
provided for in such letters, not to, directly or indirectly, (1) offer for
sale, sell, pledge or otherwise dispose of (or enter into any transaction or
device which is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock or (2) enter into
any swap or other derivatives transaction that transfers to another, in whole or
in part, any of the economic benefits or risks of ownership of such shares of
Common Stock, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case for a period of 180 days from the date of the
Prospectus, without the prior written consent of ▇▇▇▇▇▇ Brothers Inc. on behalf
of the Underwriters;
(j) Prior to the Effective Date, to apply for the listing of
the Stock on the New York Stock Exchange, and to use its best efforts to
complete that listing, subject only to official notice of issuance, prior to the
First Delivery Date;
(k) To apply the net proceeds from the issuance and sale of
the Stock as set forth in the Prospectus;
(l) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "INVESTMENT COMPANY" as
defined in the Investment Company Act of 1940, as amended; and
(m) In connection with the Directed Share Program, the Company
will ensure that the Directed Shares will be restricted to the extent required
by the National Association of Securities Dealers, Inc. (the "NASD") or the NASD
rules from sale, transfer, assignment, pledge or hypothecation for a period of
three months following the date of the effectiveness of the Registration
Statement. ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. will notify the Company as to which
Directed Share Participants will need to be so restricted. The Company will
direct the removal of such transfer restrictions upon the expiration of such
period of time.
(n) The Company will pay all fees and disbursements of counsel
incurred by the Underwriters in connection with the Directed Share Program
(including the printing (or reproduction) and delivery (including postage, air
freight charges and charges for counting and packaging) of such copies of the
Directed Share Program materials) and stamp duties, similar taxes or duties or
other taxes, if any, incurred by the Underwriters in connection with the
Directed Share Program.
(o) Furthermore, the Company covenants with ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Inc. that the Company will comply with all applicable securities and
other applicable laws, rules and regulations in each foreign jurisdiction in
which the Directed Shares are offered in connection with the Directed Share
Program.
13
SECTION 7. Expenses. The Company agrees to pay (a) the costs incident
to the authorization, issuance, sale and delivery of the Stock and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus,
all as provided in this Agreement; (d) the filing fees incident to securing the
review by the National Association of Securities Dealers, Inc. of the terms of
sale of the Stock; (e) any applicable listing or other fees; (f) the reasonable
fees and expenses of qualifying the Stock under the securities laws of the
several jurisdictions as provided in Section 6(h) and of preparing, printing and
distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the Underwriters); (g) the costs and expenses of the Company relating
to investor presentations on any "ROAD SHOW" undertaken in connection with the
marketing of the offering of the Stock, including, without limitation, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, travel and lodging
expenses of the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with the road
show; and (h) all other costs and expenses incident to the performance of the
obligations of the Company under this Agreement; provided that, except as
provided in this Section 7 and in Section 12, the Underwriters shall pay their
own costs and expenses, including the costs and expenses of their counsel, any
transfer taxes on the Stock which they may sell and the expenses of advertising
any offering of the Stock made by the Underwriters.
SECTION 8. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a); no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with or otherwise resolved to the
satisfaction of the Commission.
(b) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Stock, the
Registration Statement and the Prospectus, and all other legal matters relating
to this Agreement, the issuance and sale of the Stock and the other transactions
contemplated hereby shall be reasonably satisfactory in all material respects to
counsel for the Underwriters.
(c) Cinemark USA, Inc. shall have entered into a senior
secured credit facility with a syndicate of lenders led by ▇▇▇▇▇▇ Commercial
Paper Inc. consisting of a $150 million term loan and a $100 million revolving
credit facility and shall have satisfied all conditions precedent thereto, under
such terms as are described in the Prospectus.
14
(d) Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P. shall have
furnished to the Representatives their written opinion, as counsel to the
Company, addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Representatives, to the effect that:
(i) The Company is duly incorporated and validly
existing as a corporation in good standing under the laws of
the State of Delaware, the jurisdiction of its organization.
Each significant subsidiary identified on schedule II attached
thereto (the "SUBSIDIARIES") is validly existing as a
corporation or other business organization, as applicable, in
good standing under the laws of the jurisdiction of its
organization. The Company and each of the Subsidiaries is duly
qualified and in good standing as a foreign corporation or
other business organizations, as applicable, in each
jurisdiction listed on schedule III attached thereto. The
Company has all corporate power and authority necessary to own
or hold its properties and conduct the businesses in which it
is engaged;
(ii) All of the issued and outstanding capital stock
or membership interests of each Subsidiary has been duly
authorized and validly issued and is fully paid and
nonassessable and, to such counsel's knowledge, are owned
directly or indirectly by the Company, free and clear of all
liens, encumbrances or claims, except as described in the
Prospectus;
(iii) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued shares of
capital stock of the Company have been duly authorized and
validly issued, are fully paid and non-assessable and conform
to the description thereof contained in the Prospectus. The
Stock to be delivered on the date hereof have been duly
authorized and, when issued and delivered by the Company in
accordance with the Underwriting Agreement, will be validly
issued, fully paid and nonassessable. Except as disclosed in
the Prospectus, there are no preemptive rights or other rights
to subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any shares of the Stock pursuant to the
Company's charter or bylaws or any agreement listed in a
schedule to the opinion;
(iv) The execution and delivery of the Underwriting
Agreement by the Company has been duly authorized by all
necessary corporate action on the part of the Company, and the
Underwriting Agreement has been duly and validly executed and
delivered by the Company;
(v) The execution and delivery of the Underwriting
Agreement by the Company does not, and the performance of the
Underwriting Agreement by the Company and the consummation of
the transactions contemplated by the Underwriting Agreement by
the Company will not, (A) conflict with or result in a breach
of any of the terms or provisions of, or constitute a default
under, any agreement listed in a schedule to the opinion, or
(B) result in a violation of the Certificate of Incorporation
or Bylaws or any of the Subsidiary Charter Documents, or, (C)
result in a violation of any Included Law (as defined below)
or, to such counsel's knowledge, any judgment, decree or order
known to such
15
counsel of any court or any public, governmental or regulatory
agency or body having jurisdiction over the Company or any of
the Subsidiaries or any of their respective properties or
assets. The opinion in clause (A) above shall be after giving
effect to the Offering, and such counsel expresses no opinion
in clause (A) above with respect to breaches or violations of
or defaults under any covenant, restriction or provision with
respect to financial ratios or tests, or any aspect of the
financial condition or results of operations of any party;
(vi) No consent, approval, authorization, order,
registration or filing of or with any court or governmental
agency or body is required under any Included Law for the
execution, delivery and performance of the Underwriting
Agreement by the Company or the consummation of the
transactions contemplated by the Underwriting Agreement,
except for (A) such as may be required under any foreign
securities laws, including such as have been obtained under
the laws and regulations of jurisdictions outside the United
States in which the Directed Shares are offered, or state
securities or Blue Sky laws in connection with the purchase
and distribution of the Stock by the Underwriters, as to which
such counsel expresses no opinion, (B) such as have been made
or obtained under the Securities Act, (C) the clearance of the
offering by the National Association of Securities Dealers and
(D) such consents, approvals, authorizations, orders, filings
or registrations as have been obtained or made;
(vii) The Registration Statement and the Prospectus
and any amendments thereof or supplements thereto (other than
the financial statements and schedules and other financial and
statistical data included or incorporated by reference
therein, as to which such counsel expresses no opinion), as of
their respective effective or issue dates, complied as to form
in all material respects with the requirements of the
Securities Act and the Rules and Regulations;
(viii) The Registration Statement was declared
effective under the Securities Act, as of [__________], the
Prospectus was filed with the Commission pursuant to Rule
424(b)[__] on [_________], and no stop order suspending the
effectiveness of the Registration Statement has been issued by
the Commission and, to such counsel's knowledge, no
proceedings for that purpose are pending or threatened by the
Commission;
(ix) To such counsel's knowledge, there are no
contracts or other documents required to be described in the
Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement by the Securities Act
or the Rules and Regulations which have not been described or
filed as exhibits to the Registration Statement;
(x) The statements in the Prospectus under the
captions "Description of Capital Stock" and "Material U.S.
Federal Income Tax Consequences to Non-U.S. Holders" insofar
as such statements describe federal or state statutes, rules
and regulations, constitute a fair and accurate summary
thereof and, the opinion of
16
such counsel filed as Exhibit 5.1 to the Registration
Statement is confirmed and the Underwriters may rely upon such
opinion as if it were addressed to them;
(xi) Except as described in the Prospectus, to such
counsel's knowledge, there are no contracts, agreements or
understandings between the Company and any person granting
such person the right to require the Company to file a
registration statement under the Securities Act with respect
to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in
the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to
any other registration statement filed by the Company under
the Securities Act;
(xii) The Company is not an "investment company" as
defined in the Investment Company Act of 1940, as amended; and
(xiii) To such counsel's knowledge, there is no
litigation or governmental or other action, suit, proceeding
or investigation before any court or before or by any public,
regulatory or governmental agency or body pending or
threatened or contemplated against, or involving the
properties or business of, the Company or any of its
subsidiaries, which is of a character required to be disclosed
in the Registration Statement and the Prospectus which has not
been properly disclosed therein.
In rendering such opinion, such counsel may state that their
opinion is limited to matters governed by the Federal laws of the United States
of America, the laws of the State of New York and Texas and the General
Corporation Law of the State of Delaware (the "INCLUDED LAWS") and such counsel
may make such assumptions, qualification, exceptions and limitations as are
standard in such opinions or otherwise reasonably acceptable to Underwriters'
counsel. Such opinion shall also be to the effect that (x) such counsel has
acted as counsel to the Company in connection with the preparation of the
Registration Statement and (y) based on the foregoing, no facts have come to the
attention of such counsel which lead them to believe that the Registration
Statement (except for the financial statements and financial schedules and other
financial and statistical data included therein, as to which such counsel need
express no belief) as of the Effective Date, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, or that the
Prospectus (except as stated above), as of its date and as of such Delivery
Date, contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The foregoing opinion and statement may be qualified by a
statement to the effect that such counsel does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (other than as set forth in clause (x)
above).
(e) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall have furnished to the
Representatives his written opinion, as General Counsel to the Company,
addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Representatives, to the effect that:
17
(i) The Company and each of its subsidiaries have
been duly organized and are validly existing as corporations
or other business organizations, as applicable, in good
standing under the laws of their respective jurisdictions of
incorporation or organization, as applicable, are duly
qualified to do business and are in good standing as foreign
corporations or other business organizations, as applicable,
in each jurisdiction in which their respective ownership or
lease of property or the conduct of their respective
businesses requires such qualification, except where failure
to be so qualified would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect,
and have all power and authority necessary to own or hold
their respective properties and conduct the businesses in
which they are engaged, except where such would not reasonably
be expected to have a Material Adverse Effect;
(ii) To the best of such counsel's knowledge and
other than as set forth in the Prospectus, there are no legal
or governmental proceedings (whether domestic or foreign)
pending to which the Company or any of its subsidiaries is a
party or of which any property or assets of the Company or any
of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would not
reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect; and, to the best of such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others;
(iii) To the best of such counsel's knowledge, there
are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules
and Regulations which have not been described or filed as
exhibits to the Registration Statement;
(iv) The issue and sale of the shares of Stock being
delivered on such Delivery Date by the Company pursuant to
this Agreement, and the execution, delivery and compliance by
the Company with all of the provisions of this Agreement and
the consummation of the transactions contemplated hereby will
not (i) conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement,
lease, pledge or other agreement or instrument known to such
counsel to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, (ii) result in any
violation of the provisions of the charter or bylaws of the
Company or the charter or bylaws or any joint venture,
partnership, limited liability company, shareholders' or other
agreement or organizational document any of the Company's
subsidiaries, or (iii) result in any violation of any statute
or any order, rule or regulation known to such counsel of any
court or governmental agency or body (whether domestic or
foreign) having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets except in
the case of clauses (i) and (iii), such conflicts, breaches or
violations that would not reasonably be
18
expected to have, individually or in the aggregate, a Material
Adverse Effect; and, except for the registration of the Stock
under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state or
foreign securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body (whether
domestic or foreign) is required for the execution, delivery
and performance of this Agreement or any of the other
documents to be entered into in connection with the issuance
and sale of the Stock and the consummation of the transactions
contemplated hereby and thereby, except for such consents,
approvals, authorizations, orders, filings or registrations as
have been obtained or made; and
(v) Except as described in the Prospectus, to the
best of such counsel's knowledge, there are no contracts,
agreements or understandings between the Company and any
person granting such person the right to require the Company
to file a registration statement under the Securities Act with
respect to any securities of the Company owned or to be owned
by such person or to require the Company to include such
securities in the securities registered pursuant to the
Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the
Company under the Securities Act.
Such opinion shall also be to the effect that (x) such counsel
has acted as counsel to the Company in connection with the preparation of the
Registration Statement and (y) based on the foregoing, no facts have come to the
attention of such counsel which leads him to believe that the Registration
Statement (except for the financial statements and financial schedules and other
financial and statistical data included therein, as to which such counsel need
express no belief) as of the Effective Date, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, or that the
Prospectus (except as stated above), as of its date and as of such Delivery
Date, contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading and such counsel may make such assumptions, qualification,
exceptions and limitations as are standard in such opinions or otherwise
reasonably acceptable to Underwriters' counsel.
(f) The Representatives shall have received from ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, such opinion or opinions,
dated such Delivery Date, with respect to the issuance and sale of the Stock,
the Registration Statement, the Prospectus and other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents and information as they may reasonably request to
enable them to pass upon such matters.
(g) At the time of execution of this Agreement, the
Representatives shall have received from Deloitte & Touche LLP a letter, in form
and substance satisfactory to the Representatives, addressed to the Underwriters
and dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of accountants under
19
Rule 2-01 of Regulation S-X of the Commission and (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial information
and other matters ordinarily covered by accountants' "COMFORT LETTERS" to
underwriters in connection with registered public offerings.
(h) With respect to the letter of Deloitte & Touche LLP
referred to in the preceding paragraph and delivered to the Representatives
concurrently with the execution of this Agreement (the "INITIAL LETTERS"), the
Company shall have furnished to the Representatives a letter (the "BRING-DOWN
LETTER") of such accountants, addressed to the Underwriters and dated such
Delivery Date (i) confirming that they are independent public accountants within
the meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, (ii) stating, as of the date of the bring-down
letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of the
bring-down letter), the conclusions and findings of such firm with respect to
the financial information and other matters covered by the initial letters and
(iii) confirming in all material respects the conclusions and findings set forth
in the initial letter.
(i) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board, President
or Chief Financial Officer stating that:
(i) The representations, warranties and agreements of
the Company in Section 1 are true and correct as of such
Delivery Date; the Company has complied with all its
agreements contained herein; and the conditions set forth in
Sections 8(a), 8(j) and 8(k) have been fulfilled; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of
the Effective Date, the Registration Statement and Prospectus
did not include any untrue statement of a material fact and
did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and (B) since the Effective Date no event has
occurred which should have been set forth in a supplement or
amendment to the Registration Statement or the Prospectus.
(j) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Prospectus (A) any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus or (B) since such date there
shall not have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the consolidated financial position,
stockholders' equity, results of operations, business or prospects of the
Company and its subsidiaries taken as a whole, otherwise than as set forth or
20
contemplated in the Prospectus, the effect of which, in any such case described
in clause (A) or (B), is, in the judgment of the Representatives, so material
and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Stock being delivered on such Delivery
Date on the terms and in the manner contemplated in the Prospectus.
(k) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the Company's debt
securities by any "NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION," as
that term is defined by the Commission for purposes of Rule 436(g)(2) of the
Rules and Regulations and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities.
(l) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or the
settlement of such trading generally shall have been materially disrupted or
minimum prices shall have been established on any such exchange or such market
by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall have
been declared by Federal or state authorities, (iii) the United States shall
have become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions, including without limitation as a result of terrorist
activities after the date hereof, (or the effect of international conditions on
the financial markets in the United States shall be such) as to make it, in the
judgment of the Representatives, impracticable or inadvisable to proceed with
the public offering or delivery of the Stock being delivered on such Delivery
Date on the terms and in the manner contemplated in the Prospectus.
(m) The New York Stock Exchange, Inc. shall have approved the
Stock for listing, subject only to official notice of issuance.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters. The Representatives may in their
sole discretion waive on behalf of the Underwriters compliance with any
conditions to the obligations of the Underwriters hereunder.
SECTION 9. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each
Underwriter, its officers and employees and each person, if any, who controls
any Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Stock), to which that Underwriter,
officer,
21
employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or (B) in
any materials or information provided to investors by, or with the approval of,
the Company in connection with the marketing of the offering of the Stock
("MARKETING MATERIALS"), including any road show or investor presentations made
to investors by the Company (whether in person or electronically), (ii) the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or in any Marketing Materials, any material fact required to be stated
therein or necessary to make the statements therein not misleading, or (iii) any
act or failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Stock or the offering
contemplated hereby, and that is included as part of or referred to in any loss,
claim, damage, liability or action arising out of or based upon matters covered
by clause (i) or (ii) above (provided that the Company shall not be liable under
this clause (iii) to the extent that it is determined in a final judgment by a
court of competent jurisdiction that such loss, claim, damage, liability or
action resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such Underwriter through its gross negligence or willful
misconduct), and shall reimburse each Underwriter and each such officer,
employee or controlling person promptly upon demand for any legal or other
expenses reasonably incurred by that Underwriter, officer, employee or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action (i) arises out of, or is based upon, any untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any such
amendment or supplement, in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for inclusion
therein which information consists solely of the information specified in
Section 9(g) or (ii) results solely from an untrue statement of material fact
contained in, or the omission of a material fact from, such preliminary
prospectus, which untrue statement or omission was completely corrected in the
Prospectus (as then amended or supplemented), provided that the Company shall
sustain the burden of proving that the Underwriters sold shares of Stock to the
person alleging such loss, claim, damage, liability or action without sending or
giving, at or prior to the written confirmation of such sale, a copy of the
Prospectus (as then amended or supplemented) if the Company had previously
furnished sufficient quantities of copies thereof to the Underwriters within a
reasonable amount of time prior to such sale or such confirmation, and the
Underwriters failed to deliver the corrected Prospectus, if required by law to
have so delivered it and if delivered would have cured the defect giving rise to
such loss, claim, damage, liability or action. The foregoing indemnity agreement
is in addition to any liability that the Company may otherwise have to any
Underwriter or to any officer, employee or controlling person of that
Underwriter.
(b) The Company agrees to indemnify and hold harmless ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and the other Underwriters (including their directors,
officers, employees and agents and each person, who controls ▇▇▇▇▇▇▇ ▇▇▇▇▇
Barney Inc. or any other Underwriter within the meaning of either the Securities
Act or the Exchange Act, from and against any and all losses,
22
claims, damages and liabilities to which they may become subject under the
Securities Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise (including, without limitation, any legal
or other expenses reasonably incurred in connection with defending or
investigating any such action or claim), insofar as such losses, claims damages
or liabilities (or actions in respect thereof) (i) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the prospectus wrapper material prepared by or with the consent of
the Company for distribution in foreign jurisdictions in connection with the
Directed Share Program attached to the Prospectus or any preliminary prospectus,
or arise out of or are based upon any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statement therein, when considered in conjunction with the Prospectus or any
applicable preliminary prospectus, not misleading; (ii) are caused by the
failure of any Directed Share Participant to pay for and accept delivery of the
Directed Shares allocated by the Company to such Participant; or (iii) relate
to, arise out of, or occur in connection with the Directed Share Program,
provided that, (A) in the case of clause (i) the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability (1)
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. specifically for inclusion therein and (2) results
solely from an untrue statement of material fact contained in, or the omission
of a material fact from, the prospectus wrapper material prepared by or with the
consent of the Company for distribution in foreign jurisdictions in connection
with the Directed Share Program attached to the Prospectus or any preliminary
prospectus, which untrue statement or omission was completely corrected in such
prospectus wrapper material (as then amended or supplemented), provided that the
Company shall sustain the burden of proving that ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. sold
shares of Stock to the person alleging such loss, claim, damage, liability or
action without sending or giving, at or prior to the written confirmation of
such sale, a copy of the prospectus wrapper material (as then amended or
supplemented) if the Company had previously furnished sufficient quantities of
copies thereof to ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. within a reasonable amount of time
prior to such sale or such confirmation, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. failed to
deliver the corrected prospectus wrapper material, if required by law in such
foreign jurisdictions to have so delivered it and if delivered would have cured
the defect giving rise to such loss, claim, damage, liability or action; and (B)
that in the case of clause (iii) the Company will not be liable to the extent
that such loss, claim, damage or liability results from the gross negligence or
willful misconduct of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
(c) Without limitation of and in addition to its obligations
under the other paragraphs of this Section 9, the Company agrees to indemnify
and hold harmless ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. (the "INDEPENDENT UNDERWRITER"), its
directors, officers, employees and agents and each person who controls the
Independent Underwriter within the meaning of either the Securities Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject, insofar as such
losses, claims, damages or liabilities (or action in respect thereof) arise out
of or are based upon the Independent Underwriter's acting as a "qualified
independent underwriter" (within the meaning of National Association of
Securities Dealers, Inc. Conduct Rule 2720) in connection with the offering
contemplated by this Agreement, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with
23
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability results from the gross
negligence or willful misconduct of the Independent Underwriter; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action (i) arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus, or in any such amendment or supplement, in reliance upon and
in conformity with written information concerning such Underwriter furnished to
the Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein which information consists solely of the
information specified in Section 9(g) or (ii) results solely from an untrue
statement of material fact contained in, or the omission of a material fact
from, such preliminary prospectus, which untrue statement or omission was
completely corrected in the Prospectus (as then amended or supplemented),
provided that the Company shall sustain the burden of proving that the
Underwriters sold shares of Stock to the person alleging such loss, claim,
damage, liability or action without sending or giving, at or prior to the
written confirmation of such sale, a copy of the Prospectus (as then amended or
supplemented) if the Company had previously furnished sufficient quantities of
copies thereof to the Underwriters within a reasonable amount of time prior to
such sale or such confirmation, and the Underwriters failed to deliver the
corrected Prospectus, if required by law to have so delivered it and if
delivered would have cured the defect giving rise to such loss, claim, damage,
liability or action.
(d) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, its officers and employees, each of its
directors, and each person, if any, who controls the Company within the meaning
of the Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which the Company or any
such director, officer or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, any material fact required to be stated therein or necessary
to make the statements therein not misleading, but in each case only to the
extent that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through the
Representatives by or on behalf of that Underwriter specifically for inclusion
therein, and shall reimburse the Company and any such director, officer or
controlling person for any legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Underwriter may
otherwise have to the Company or any such director, officer, employee or
controlling person.
(e) Promptly after receipt by an indemnified party under this
Section 9 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the
24
indemnifying party in writing of the claim or the commencement of that action;
provided, however, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have under this Section 9 except to
the extent it has been materially prejudiced by such failure and, provided
further, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have to an indemnified party otherwise than
under this Section 9. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 9 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that the Representatives shall have
the right to employ counsel to represent jointly the Representatives and those
other Underwriters and their respective officers, employees and controlling
persons who may be subject to liability arising out of any claim in respect of
which indemnity may be sought by the Underwriters against the Company under this
Section 9 if, in the reasonable judgment of the Representatives and their
counsel, it is advisable for the Representatives and those Underwriters,
officers, employees and controlling persons to be jointly represented by
separate counsel, and in that event the fees and expenses of not more than one
separate firm (in addition to any local counsel) shall be paid by the Company.
Notwithstanding anything contained herein to the contrary, if indemnity may be
sought pursuant to Section 9 hereof in respect of such action or proceeding,
then in addition to such separate firm for the indemnified parties, the
indemnifying party shall be liable for the reasonable fees and expenses of not
more than one separate firm (in addition to any local counsel) for ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Inc., the directors, officers, employees and agents of ▇▇▇▇▇▇▇ ▇▇▇▇▇
Barney Inc., and all persons, if any, who control ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
within the meaning of either the Securities Act or the Exchange Act for the
defense of any losses, claims, damages and liabilities arising out of the
Directed Share Program. No indemnifying party shall (i) without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(f) If the indemnification provided for in this Section 9
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 9(a), 9(b), 9(c) or 9(d) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be
25
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other from the offering of the Stock or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Underwriters on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Stock purchased
under this Agreement (before deducting expenses) received by the Company, on the
one hand, and the total underwriting discounts and commissions received by the
Underwriters with respect to the shares of the Stock purchased under this
Agreement, on the other hand, bear to the total gross proceeds from the offering
of the shares of the Stock under this Agreement, in each case as set forth in
the table on the cover page of the Prospectus. Benefits received by the
Independent Underwriter in its capacity as "qualified independent underwriter"
shall be deemed to be equal to the compensation received by the Independent
Underwriter for acting in such capacity. The relative fault shall be determined
by reference to whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
Section 9 were to be determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section shall be deemed to include, for purposes of
this Section 9(f), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 9(f), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Stock underwritten by it and distributed to the public
was offered to the public exceeds the amount of any damages which such
Underwriter has otherwise paid or become liable to pay by reason of any untrue
or alleged untrue statement or omission or alleged omission. Notwithstanding the
provisions of this Section 9(f), the Independent Underwriter in its capacity as
"qualified independent underwriter" (within the meaning of National Association
of Securities Dealers, Inc. Conduct Rule 2720) shall not be responsible for any
amount in excess of the compensation received by the Independent Underwriter for
acting in such capacity. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 9(f) are several in proportion to their respective underwriting
obligations and not joint.
(g) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering of the
Stock by the Underwriters set forth on the cover page of, the legend concerning
over-allotments on the inside front cover page of and the concession and
reallowance figures appearing under the caption "Underwriting" in, the
Prospectus are correct and constitute the only information concerning such
Underwriters
26
furnished in writing to the Company by or on behalf of the Underwriters
specifically for inclusion in the Registration Statement and the Prospectus.
SECTION 10. Defaulting Underwriters. If, on either Delivery Date, any
Underwriter defaults in the performance of its obligations under this Agreement,
the remaining non-defaulting Underwriters shall be obligated to purchase the
Stock which the defaulting Underwriter agreed but failed to purchase on such
Delivery Date in the respective proportions which the number of shares of the
Firm Stock set opposite the name of each remaining non-defaulting Underwriter in
Schedule 1 hereto bears to the total number of shares of the Firm Stock set
opposite the names of all the remaining non-defaulting Underwriters in Schedule
1 hereto; provided, however, that the remaining non-defaulting Underwriters
shall not be obligated to purchase any of the Stock on such Delivery Date if the
total number of shares of the Stock which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such date exceeds 9.09% of the
total number of shares of the Stock to be purchased on such Delivery Date, and
any remaining non-defaulting Underwriter shall not be obligated to purchase more
than 110% of the number of shares of the Stock which it agreed to purchase on
such Delivery Date pursuant to the terms of Section 3. If the foregoing maximums
are exceeded, the remaining non-defaulting Underwriters, or those other
underwriters satisfactory to the Representatives who so agree, shall have the
right, but shall not be obligated, to purchase, in such proportion as may be
agreed upon among them, all the Stock to be purchased on such Delivery Date. If
the remaining Underwriters or other underwriters satisfactory to the
Representatives do not elect to purchase the shares which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such Delivery Date,
this Agreement (or, with respect to the Second Delivery Date, the obligation of
the Underwriters to purchase, and of the Company to sell, the Option Stock)
shall terminate without liability on the part of any non-defaulting Underwriter
or the Company, except that the Company will continue to be liable for the
payment of expenses to the extent set forth in Sections 7 and 12. As used in
this Agreement, the term "UNDERWRITER" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 10, purchases Stock which a
defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have to the Company for damages caused by
its default. If other underwriters are obligated or agree to purchase the Stock
of a defaulting or withdrawing Underwriter, either the Representatives or the
Company may postpone the Delivery Date for up to seven full business days in
order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
SECTION 11. Termination. The obligations of the Underwriters hereunder
may be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Firm Stock if, prior to that
time, any of the events described in Sections 8(j), 8(k) or 8(l), shall have
occurred or if the Underwriters shall decline to purchase the Stock for any
reason permitted under this Agreement.
SECTION 12. Reimbursement of Underwriters' Expense. If the Company
shall fail to tender the Stock for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any
27
other condition of the Underwriters' obligations hereunder required to be
fulfilled by the Company (including, without limitation, with respect to the
transactions) is not fulfilled, the Company will reimburse the Underwriters for
all reasonable out-of-pocket expenses (including fees and disbursements of
counsel) incurred by the Underwriters in connection with this Agreement and the
proposed purchase of the Stock, and upon demand the Company shall pay the full
amount thereof to the Representatives. If this Agreement is terminated pursuant
to Section 10 by reason of the default of one or more Underwriters, the Company
shall not be obligated to reimburse any defaulting Underwriter on account of any
expenses.
SECTION 13. Notices, Etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc., 1285 Avenue of
the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Syndicate
Registration Department (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a copy, in the case of any
notice pursuant to Section 9(e), to the Director of Litigation, Office of the
General Counsel, ▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇;
(b) if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a
copy to Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P., Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
P.C., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇;
provided, however, that any notice to an Underwriter pursuant to Section 9(e)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by ▇▇▇▇▇▇ Brothers Inc. on behalf of the
Representatives.
SECTION 14. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the Company,
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreement of the Underwriters contained
in Section 9(d) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company and any person controlling the
Company within the meaning of Section 15 of the Securities Act. Nothing in this
Agreement is intended or shall be construed to give any person, other than the
persons referred to in this Section 14, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
28
SECTION 15. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Stock and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
SECTION 16. Definition of the Terms "BUSINESS DAY" and "SUBSIDIARY".
For purposes of this Agreement, (a) "BUSINESS DAY" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "SUBSIDIARY" has the meaning set forth in Rule 405 of the Rules
and Regulations.
SECTION 17. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
SECTION 18. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
SECTION 19. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement among the
Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
CINEMARK, INC.
By:
---------------------------
Name:
Title:
Accepted:
▇▇▇▇▇▇ BROTHERS INC.,
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By ▇▇▇▇▇▇ BROTHERS INC.
By:
--------------------------
Authorized Representative
By ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By:
--------------------------
Authorized Representative
SCHEDULE 1
Number of Shares of Firm
Underwriters Stock to be Purchased
▇▇▇▇▇▇ Brothers Inc........................................................
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc...................................................
Bear ▇▇▇▇▇▇▇ & Co Inc. ....................................................
Credit Suisse First Boston Corporation.....................................
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co........................................................
Total......................................................................
SCHEDULE 2
Stockholders, Officers and Directors subject to
Lock-Up
EXHIBIT A
LOCK-UP LETTER AGREEMENT
CINEMARK, INC.
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▇▇▇▇▇▇ BROTHERS INC.,
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.,
As Representatives of the several
Underwriters named in Schedule 1,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
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Dear Sirs:
The undersigned understands that you and certain other firms
propose to enter into an
Underwriting Agreement (the "UNDERWRITING AGREEMENT")
providing for the purchase by you and such other firms (the "UNDERWRITERS") of
shares (the "SHARES") of Class A Common Stock, par value $0.001 per share (the
"COMMON Stock"), of Cinemark, Inc., a Delaware corporation (the "COMPANY"), and
that the Underwriters propose to reoffer the Shares to the public (the
"OFFERING").
In consideration of the execution of the Underwriting
Agreement by the Underwriters, and for other good and valuable consideration,
the undersigned hereby irrevocably agrees that, without the prior written
consent of ▇▇▇▇▇▇ Brothers Inc., on behalf of the Underwriters, the undersigned
will not, directly or indirectly, (1) offer for sale, sell, pledge, or otherwise
dispose of (or enter into any transaction or device that is designed to, or
could be expected to, result in the disposition by any person at any time in the
future of) any shares of Common Stock (including, without limitation, shares of
Common Stock that may be deemed to be beneficially owned by the undersigned in
accordance with the rules and regulations of the Securities and Exchange
Commission and shares of Common Stock that may be issued upon exercise of any
option or warrant) or securities convertible into or exchangeable for Common
Stock (other than the Shares sold to the Underwriters) owned by the undersigned
on the date of execution of this Lock-Up Letter Agreement or on the date of the
completion of the Offering, or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, for a period of 180 days
after the date of the final Prospectus relating to the Offering.
Notwithstanding the foregoing, (i) if the undersigned is an
individual, he or she may transfer any shares of Common Stock or securities
convertible into or exchangeable or
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exercisable for the Company's Common Stock either during his or her lifetime or
on death by gift, will or intestacy to members of his or her immediate family or
to a trust the beneficiaries of which are exclusively the undersigned and/or a
member or members of his or her immediate family, (ii) if the undersigned is an
entity, such entity may transfer any securities of the Company (a) to a
beneficial owner (as that term is defined in Rule 13d-3 under the Exchange Act)
of such entity, in accordance with such beneficial owner's pro rata interest in
such entity, (b) to an entity, the beneficial owner or owners of which are
exclusively the transferor entity, the beneficial owner or owners of the
transferor entity and/or a member of his or her immediate family (c) to any
affiliate of such entity; provided, however, that prior to any transfer
described in items (i) or (ii) of this paragraph, each transferee shall execute
an agreement, satisfactory to each of ▇▇▇▇▇▇ and Salomon, pursuant to which each
transferee shall agree to receive and hold such shares of Common Stock, or
securities convertible into or exchangeable or exercisable for the Common Stock,
subject to the provisions hereof. For the purposes of this paragraph, "immediate
family" shall mean spouse, lineal descendant, father, mother, brother or sister
of the transferor.
In furtherance of the foregoing, the Company and its transfer
agent are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Lock-Up Letter
Agreement.
It is understood that, if the Company notifies the undersigned
that it does not intend to proceed with the Offering, if the Underwriting
Agreement does not become effective, or if the Underwriting Agreement (other
than the provisions thereof which survive termination) shall terminate or be
terminated prior to payment for and delivery of the Shares, the undersigned will
be immediately released without any further action on their or its part from
their or its obligations under this Lock-Up Letter Agreement.
The undersigned understands that the Company and the
Underwriters will proceed with the Offering in reliance on this Lock-Up Letter
Agreement.
Whether or not the Offering actually occurs depends on a
number of factors, including market conditions. Any Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
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The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into this Lock-Up Letter
Agreement and that, upon request, the undersigned will execute any additional
documents necessary in connection with the enforcement hereof. Any obligations
of the undersigned shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
Very truly yours,
By:
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Name:
Title:
Dated:
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